How to Qualify for HUD Homes

by Rocco Pendola

Depending on the circumstances, HUD homes can provide buyers with a sweet deal. A HUD home is a property that HUD (the U.S. Department of Housing and Urban Development) foreclosed on as the result of a default on an FHA-insured loan. Generally, the qualifications you need to purchase a HUD home are no different from eligibility requirements associated with traditional and private transactions. If you wish to obtain a HUD home through a government-sponsored program, however, you must meet specific criteria.

1

Obtain financing. As the HUD Homes website explains, if you have the cash or a mortgage approval, you can buy a HUD Home. During an initial time frame, HUD only accepts bids from people who intend to occupy their unit. If a HUD home does not sell, availability extends to all buyers, including investors.

2

Inform your lender of any special characteristics that might qualify you for a HUD special program. HUD offers HUD homes at a 50 percent discount through its Good Neighbor Next Door plan. You must be a pre-K through 12th grade teacher, EMT, police officer or firefighter to qualify for this program. HUD only offers these opportunities in areas the agency designates as community revitalization areas.

3

Contact your local government about special programs it offers in conjunction with HUD. While this is an indirect route, it is another way to qualify for a HUD home at a significant discount. As the HUD website points out, HUD offers local governments the opportunity to purchase unsold HUD homes at massive discounts -- as low as $1 after 180 days of no sales activity -- so they may offer low- to moderate-income homeownership opportunities in their community. While local program requirements vary, you typically must earn less than your area's median income to be eligible for these types of programs.

Tip

Before you make an offer on a HUD home, get it inspected. HUD is not responsible for repairs before, during or after a HUD home sale.

About the Author

As a writer since 2002, Rocco Pendola has published numerous academic and popular articles in addition to working as a freelance grant writer and researcher. His work has appeared on SFGate and Planetizen and in the journals "Environment & Behavior" and "Health and Place." Pendola has a Bachelor of Arts in urban studies from San Francisco State University.

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